Committee on Finance. - Vote 5—Office of the Minister for Finance (Resumed).

Thursday, 19 July 1945

Dáil Éireann Debate
Vol. 97 No. 25

Page of 23

Mr. Norton:I had almost concluded when this debate was adjourned on the last occasion and I do not desire to add much to what I said then. There [2788] is, however, one point which I would like to emphasise and it has relation to the lump sums in respect of which the Minister for Finance has declined to pay the increased bonus in the case of persons who retired between July, 1940, and December, 1944. It may be that in approaching this matter the Department of Finance said: “Whilst we will pay the bonus on the basis of an index figure of 110 as from 1st January last we will not pay the bonus on the basis of that index figure in respect of past payments; that is, in respect of payments which were actually made between July, 1940, and December, 1944.”

I would like to point out that, whilst an officer may have received a lump sum together with an annual pension if he retired between July, 1940, and December, 1944, it would be unfair to regard the lump sum as proper only to the period in which it was received, because it must be remembered that the lump sum was purchased only by the officer agreeing to surrender approximately 25 per cent. of his annual pension. If he had decided not to adopt the superannuation scheme which gave him a smaller pension and a lump sum, he would have received a larger rate of pension and the mere fact that he decided to accept a smaller rate of pension and have a lump sum gives the lump sum the continuing character that the annual pension has, and it would be unfair simply because an officer decided to adopt the scheme of a smaller pension and a lump sum that the very fact of doing so should deprive him of having applied to that lump sum the same scale of bonus as applies to the annual pension.

In the case of women the pensions are calculated under the 1859 Superannuation Act. They have no opportunity of electing to take a lump sum; they have to take an annual pension. The result is that any woman who retired between July, 1940, and December, 1944, got the bonus on the index figure of 110 on her pension as from the 1st January, whereas a man, because his pension was calculated under the 1909 Act, got only a bonus of 110 on threequarters of his pension, [2789] the other quarter having been surrendered in order to obtain the lump sum.

I think the Minister must, in all equity, recognise that the lump sum should not be lined up against an officer's service at the time he retired, but that it is as much a part of the provision for his future as is the annual pension. That being so, I hope the Minister will be magnanimous and will recognise that it is unfair to discriminate against a man who gets a lower salary in the lump sum as compared with the woman whose pension is calculated under an Act which gives only a pension and no lump sum.

This is a problem that is not likely to recur and a settlement could be made without imposing any undue burden on the State. It is the merest justice to give those concerned a bonus calculated with reference to the index figure of 110, seeing that if they had the normal bonus applied to their annual pensions and their lump sums, they would have applied to the pensions and the lump sums a bonus calculated not on an index figure of 110, but in many cases on the basis of an index figure of 190. Asking to have this calculated on an index figure of 110 in respect of the small number of persons involved is asking for something which is obviously just. I hope, if the Minister cannot concede this claim now, he will examine the matter sympathetically and in the near future do the barest justice to those concerned.

Mr. Dillon:It is very important that we should know right at the beginning of the present Minister's tenure of office does he still believe in the Douglas Credit Scheme? He made it known to a good many people some time ago that he was veering round to the conclusion that it was a most effective panacea for the economic ills of our people. I do not know whether the appendix to the Irish Banking Commission's report had any effect on his judgment or not, but if he still adheres to the view that the Douglas Credit Scheme is a desirable plan, I would be grateful if he would rebut for us here the submissions made in the [2790] appendix to the Irish Banking Commission report.

An Leas-Cheann Comhairle:I do not think the Douglas Scheme would arise on this Estimate.

Mr. Dillon:I hope it will not, but I am taking precautions lest it should.

An Leas-Cheann Comhairle:Monetary policy and currency generally would not arise on this Estimate.

Mr. Dillon:I referred to the Douglas Credit Scheme, but I have no desire to go any further into the question of monetary policy. You can see what the administration would be like under the Douglas Credit Scheme. The Department of Finance would consist very largely of printing presses designed for A and B money and the staff would be working overtime to produce it. There is no doubt that there is a general tendency amongst persons concerned for social reform to contemplate a scheme of taxation largely designed to effect a substantial transfer of incomes from one group in the community to another with an equalitarian end in view.

An Leas-Cheann Comhairle:Is the Deputy proposing to discuss taxation now?

Mr. Dillon:The merits for or against that, I have no desire to discuss, but the Minister, I think, might turn his mind to this: the merits of that question, which must some time be discussed, cannot be discussed in the absence of a statistic which I do not think is at present available. I should be glad to know from the Minister if he proposes administratively to repair that error and to provide us and his own Department with information as to the number of persons in the country with incomes, say, under £200, between £200 and £300, between £300 and £400, between £400 and £500, between £500 and £600 and so on up to the brackets where these statistics are now available, because when we get into the supertax bracket, the Revenue Commissioners already provide these [2791] statistics. The income of the vast bulk of our people, however, falls far below the supertax bracket, and, so far as I am aware, no reliable statistic in their regard has as yet been made available. I should be glad if the Minister would look into it and, if it is practicable, make it available as soon as he conveniently can.

I want to state most emphatically something which will not interest the body of the Deputies one ha'porth and which yet goes to the very root of honest administration in our community. Deputy Cosgrave is here and I expect he will give me a hand on it, because he is, and I was, Chairman of the Public Accounts Committee. For the protection of civil servants, of contractors, of Ministers, and of all elements in the community, the Department of Finance rules lay down that, if you want to dispose of Government property, you must put it up to tender, that no facilities for back-door negotiations will be provided, because, although in many cases it might be easier to dispose of the Government property in that way, the evils which might arise if such a practice were approved convinced everybody that it was better to suffer the inconvenience of the universal rule that if surplus Government property is to be disposed of, it will be put up to auction and that anybody may buy it by tender.

Recently the Army announced that they wanted to dispose of a large surplus of used lorries and, of course, before any Department can dispose of its property, or enter into commitments of that kind, it must seek the approval of the Department of Finance. This is the astonishing proposal, that the lorries should be offered to Córas Iompair Éireann and nobody else allowed to bid, that Córas Iompair Éireann should take over the lorries at the valuation set upon them by three independent valuers and that if there were any lorries which Córas Iompair Éireann did not want to take, these could be put up to tender and disposed of. What has actually happened is that Córas Iompair Éireann is going to take them all, even if they make matchwood of them, because they do not want anybody else to have [2792] them, lest alternative purchasers should be competitors with them.

But here is the danger. If the Department is going to approve a scheme whereunder Government property is sold to one person—and remember that Córas Iompair Éireann, an incorporated company in the eyes of the law, is an individual—and nobody else is to be allowed to compete, in the first case in which that happens, you will get three independent ruthless valuers, in all probability, and the transaction will involve the State in no loss whatever; but, in nine months' time, a similar situation will arise and some other body will come along and say to whomever is the secretary of the Department which wishes to dispose of stuff: “Do not bother about having tenders and what not. I will take the whole lot.” The Department of Finance will say: “No, you cannot do that”, and this other Department will say: “Oh, but we can. You did it in respect of the lorries.” The Department of Finance will fight a vigorous battle and say that that was an exceptional case and so forth and then the Department desiring to dispose of the merchandise will say: “This is a very exceptional case, too”.

I solemnly warn the House that, if they let this transaction pass with its approval, the day will yet dawn in this country when elaborate conspiracies will be set on foot to corrupt public servants and to purchase arbitrators appointed to determine the value of goods to be sold by Departments to would-be purchasers who are not required, in accordance with the rules of the Department of Finance, to make tender for what they want to buy. You may very easily have a Government Department putting up material worth a quarter of a million pounds, and they may appoint three outside valuers. It may become eminently worth while for an unscrupulous wealthy body to pay those valuers £10,000 apiece to under-value the Government property.

We are happily blessed in this country—I have to say disagreeable things because I do not want the House to be misled in this matter—[2793] with a public service with splendid traditions and standards, the integrity of which has rarely, if ever, been called in question, though instances will occur in the best regulated families, which heretofore in our history have been dealt with in the most Draconian way by the civil servants themselves; but I warn the House that, though public servants in this country are not in receipt of princely salaries—most of them could secure very much higher remuneration had they devoted their lives to commercial enterprise rather than to the State—if the House allows a system to develop whereunder it becomes worth while for the unscrupulous would-be purchaser of Government property to offer public servants £25,000 or £30,000 in order corruptly to transfer to him at an under-valued price the property which he ought to have put up to public tender, they are striking a deadly blow at the integrity of the public service.

That Department of Finance rule, I understand, has been ridden rough shodden over by the Department of Defence and Córas Iompair Éireann in respect of this transaction relating to lorries. If the thing has not yet been consummated, I most strongly urge on the Minister for Finance to withdraw his approval of the scheme and insist that the lorries will be disposed of by tender. It is not primarily the value of the lorries I am concerned with; it is the fact that, if this deal goes through, it will be quoted as a precedent for further and further encroachments on a rule which was designed for the protection of the State, of public servants and of would-be purchasers of Government material.

I was listening to Deputy Norton talking about arbitration for the Civil Service, and I should like to hear the Minister's reply because I cannot see that there is any effective reply he can make. Our social set-up and our political set-up have withdrawn from civil servants the right to strike. The general, honourable understanding between the State and its servants is that they will not strike lest the maintenance of public order become impossible should they all simultaneously refuse to function. If you exact from [2794] the servants of the State the surrender of that right, which in every other walk of life is regarded as sacrosanct in every community, then I think you have got to give them an alternative, and that is the right to an independent arbitrator who will give them what they might have secured had they the freedom of an ordinary body of wage earners organised in a trade union.

I have been 27 years in public life— I started very young—and I have been 20 years running my own business, and if that experience has taught me anything it has taught me this: that if something is just and fair, and would be conceded were the pressure for the concession strong enough, the moment the person in a position to grant the concession makes up his mind that those things are so, he should not wait for the pressure to be brought upon him but should concede willingly and of his own goodwill that which under threat of force he would be prepared to yield. We once had a general election on this question of arbitration for the Civil Service, and a less salubrious issue on which to go to the country I cannot imagine.

Mr. Davin:It was not fought on that.

Mr. Dillon:Oh, well, the bonus and the salary of the secretary to a Department were particularly well canvassed from many a Fianna Fáil platform in my area. When you stood up in Connemara and said: “Here is a fellow with £1,200 a year,” everybody said: “Oh,” and when you added: “and he has a bonus on top of that,” there was a stampede into the ranks of Fianna Fáil, the boys who thought nobody was worth more than £1,000 a year, but who got re-elected and came back here and increased their own salaries as the first gesture of public economy. However, that is beside the point. If arbitration, as it seems to me, is founded on an argument which cannot be controverted in justice, I think we ought to concede it. I am saying that deliberately in the belief that if I were Minister for Finance I would concede it, because I think it would be little short of criminal for any responsible [2795] member of the Dáil to press that course on the Minister if he honestly believed it was impracticable or calculated to make administration impossible. Mind you, if the Minister is in a position to advance views that I do not know of, calculated to prove that it is impracticable, I am quite prepared to change my mind and confess my error. But I have never heard an argument calculated to prove that, and the argument for arbitration as set out by Deputy Norton here yesterday, and as set out in this House on divers other occasions by Deputy Costello and others, seems to me unanswerable.

The last thing I want to mention is a detail. Deputy Norton has dealt with the general question of the lump sum payable to civil servants on their retirement. That is a highly technical question, and there is only one very small detail of it to which I would like to refer, because the rest of the ground in regard to pensions and superannuation has been very exhaustively covered by Deputy Norton. In connection with the Standstill Order in relation to the bonus, when the bonus was stabilised in 1941 it remained stabilised until the Government arbitrarily stabilised it at a new figure on 1st January, 1944. Between those two dates a considerable number of civil servants retired in the ordinary course, and when the new figure at which the cost-of-living bonus was to be stabilised as from 1st January, 1944, was determined, some adjustment was made in respect of the bonus upon which the pensions of the public servants who retired between 1941 and 31st December, 1943, had been fixed, but, with one of those glorious Department of Finance reactions which is so typical of them—I can imagine the stiff rearguard action of that admirable brigade, shouting “not an inch” and grudgingly giving way a quarter of an inch about the adjustment of pensions —when that was all settled and the personification of the Department of Finance was all hot under the collar and upset and ruffled at having had to give way so much, somebody said: “Now, sir, what about adjusting the lump sum?”, at which stage he whacks [2796] the table, closes his desk and says: “To hell with the lump sum. I will do no more”. Therefore, we have the anomaly that the lump sum paid to the very small number of servants who retired between 1941 and 31st December, 1943, has not been adjusted on the same basis as that on which pensions were adjusted. It is a trifling sum of money. The possibility of the recurrence of an issue of this kind in the history of the public service is virtually unthinkable.

Let me assure the new Minister for Finance that that awful word “precedent” need have no terrors for him in regard to this. This situation is so unique that it could not conceivably be regarded as a precedent for anything if he would give to the public servants who retired during that period their lumpsum on a basis which would be equitable, taking into account the admission implied by the rectification of the figure at which the cost-of-living bonus has been stabilised as from 1st January, 1944. I am certain that what happened is substantially what I have described, that the Department of Finance was determined to make a last despairing stand and refuse to consider the payment of the increased bonus on the lump sum. I have great sympathy with the sound general principle that you must draw the line somewhere since the average person seems to think that the Treasury is a bottomless pit. Now that tempers have cooled down may I suggest that on reflection the more sensible course for the Department to take in this case would be to be logical rather than parsimonious, and that since every rule must have its exception in order to prove its validity, I respectfully submit to the Department of Finance that in this case it should make an exception.

Mr. M.E. Dockrell:I understand that some months ago the Department of Finance gave orders that post office pensioners with less than £4 a week were to be paid fortnightly. I think that is a decision which we should all commend. I have received a letter from a retired civil servant who was awarded an allowance by Mr. Justice Davitt when Chairman of the Civil [2797] Service Compensation Board. I take it that his pension is less than £4 a week, but he says that in the category to which he belongs the pensions are paid fortnightly and quarterly. He has asked me to bring to the notice of the Minister the difficulty that imposes on a man with a small pension. I suggest that what was done for the post office pensioners should be done for the retired civil servants who belong to the same category. I would ask the Minister to look into the matter and see that the pensions are paid fortnightly. In these hard times it would be of great benefit to men in that class. It would not involve any great administrative difficulty, and I hope that the Minister will be able to give a favourable reply to my representations.

Mr. M. O'Sullivan:When this Vote was under consideration on Tuesday evening reference was made to a loan that was negotiated last year between the Dublin Corporation and the Bank of Ireland, a loan for £1,000,000 at 3¼ per cent. I am not going to say that the corporation were entirely satisfied with the terms of the loan. Deputy Mulcahy, who referred to the matter, may not be aware that the Finance Committee of the Dublin Corporation succeeded in introducing a new feature into the negotiations for that loan, namely, that the bank agreed to facilitate the corporation in paying it over by instalments, or at such periods as the capital works concerned demanded. In that way, a very considerable amount of money was saved. At any rate, that new feature represents a complete departure in the negotiations which Dublin Corporation have had in transactions of that kind. The old arrangement was—it is the one that generally obtains—that the loan was paid over in full. Obviously, it would not all be required —only to the extent to which work proceeded. The major portion of the amount had, therefore, to be placed on deposit at 1 per cent., and obviously the corporation lost the difference between that 1 per cent. and the rate at which the loan was negotiated. Incidentally, may I say that in the case of the recent loan it was [2798] obtained at the cheapest rate the corporation has ever obtained a loan in close on 50 years. The terms, as I have said, were not all that could be desired, but frankly they were the best that could be obtained in the circumstances.

I am prompted to intervene in this debate to refer to the circumstances which generally obtain so far as public bodies are concerned. The Minister and Deputies are aware that at the present time the Dublin Corporation and other public bodies, in so far as capital works in relation to housing are concerned, have very large schemes prepared, and as soon as conditions permit these will be undertaken, particularly when supplies are available. A good deal of preparation and thought have been given to all that work by the experts of the local authorities. The work is being done in close collaboration with the various governmental Departments. They have co-operated in every way, but the extraordinary feature about all this planning and preparation is that while we may have these excellent schedules of schemes prepared, in the last analysis, the factor that governs the prosecution of the schemes is finance, and so far as we know nothing whatever is being done by any responsible government Department in the matter of the provision of that vital requirement. The position evidently will be that when the schemes are ready to be undertaken the local authorities will be thrown back on their own resources as they have been all down the years with, I may say, disastrous results. I can recall that in 1936 the Dublin Corporation was faced with a crisis when it was almost impossible for it to obtain the amount of money it required to keep its housing contracts going. Local authorities through the country have been faced with the position that while they were anxious to have housing, sewerage and water works schemes carried through——

An Leas-Cheann Comhairle:Is not that a matter for the Local Government Department and the corporation, and not for the Minister for Finance?

Mr. M. O'Sullivan:I am dealing [2799] with the question of finance so far as these schemes are concerned, and at the conclusion I hope to make a suggestion to the Minister which will be particularly applicable to this Vote, having regard to the importance of the work to be taken in hands.

An Leas-Cheann Comhairle:I do not think the Minister for Finance is directly responsible for the financing of these schemes.

Mr. M. O'Sullivan:He can have a very direct influence on this particular question.

Mr. Davin:Surely that is not a serious ruling, that the Minister for Finance has not responsibility for the cost of the money provided for local authorities to undertake development schemes?

An Leas-Cheann Comhairle:The Deputy is dealing with the administration of another Department than the Department of Finance.

Mr. M. O'Sullivan:A number of local authorities which have undertaken housing, sewerage or waterworks schemes have, on occasion, found it extremely hard to get money to finance them at a price which they thought was equitable. They were faced, on the other hand, with bringing such schemes into operation, and in a good many cases they have, willy willy, to accept the figures put to them either by the banks or other corporations. In that respect, these beneficial services have suffered. I suggest, more particularly where housing is concerned, where interest charges are such a dominant feature of the overheads that must be paid by the ratepayer, the taxpayer, and, eventually, the tenant, that it is time we should have some directing influence so far as the financial operations of local authorities as a whole are concerned. We have cases where loans had to be taken at rates of 4, 4½ and 5¼ per cent., resulting in a heavy deadweight, particularly on the individuals who occupy the houses. As you are aware, Sir, every house that is put up by a local authority is an uneconomic [2800] proposition measured by ordinary financial standards. It is not possible to charge the economic rent to the tenant because of his economic and domestic circumstances. The gulf has to be bridged somehow, and it has to be bridged by the taxpayer, the ratepayer, and, eventually, the tenant. I suggest that we cannot have prosperity and we cannot prosecute schemes such as I have indicated, on the right lines, until the whole question of the financing of such schemes is placed on a proper and sound foundation.

I suggest to the Minister, who is new to this office and who carries our good wishes in that particular office, that he might usefully signalise his advent to office by acting in conjunction with the Minister for Local Government in examining this whole question of finance for local authorities at the earliest possible moment, and acknowledging the fact that public authorities are in every sense utility organisations, their main objective being to give service to the community on a nonprofit basis. That being so, the public are entitled to get such services as housing, water works and public services generally, on conditions that will not create a heavy financial burden upon them in later years.

My suggestion is that the Minister should consult the Minister for Local Government at the earliest possible moment and, having examined the whole scheme of finance for public authorities, take the local authorities into confidence and indicate to them what plan he has evolved for the future. I venture to say that something along those lines is not only desirable, but is a matter of urgent necessity because what may happen is this: When the various authorities who now have their schemes prepared are in a position to put them into effect, they will proceed at once, vying with one another, and putting their various stocks on the market, in open competition with one another. That may have very serious reactions because if a public authority puts its stock on the market and that stock is not totally subscribed, its credit is immediately damaged. I suggest that a situation of that kind should not be allowed to arise and I appeal, with [2801] personal knowledge of what the position has been over a number of years, and its wide ramifications, that the time has arrived for the Minister to examine a proposition of this character.

In the debate on this Vote last year, the Minister's predecessor, on the question of pensions, which have been referred to by previous speakers here, used these words—volume 94, column 1388, Dáil Debates 28/6/1944:—

“Admittedly, many of the lowly-paid pensioners are in a bad position. I am having the position with regard to many classes of these pensioners examined at the present time. The matter has been under consideration for some time and while I am still definitely of the opinion that any further payment of emergency bonuses is not going to be helpful to the community as a whole, I would rather see something given to these poorly-paid pensioners —teachers and others—than that they should be forced to appeal to the local authorities for home help. I am told that some of them have had to do that. All I can say at the moment is that I am having the question examined”.

I should like, in the light of the undertaking which was then given by the Minister's predecessor, to ascertain from the Minister if that examination did in fact take place, and with what result. Appeals have been made from all sections of this House for one section of the community in particular, namely, the teachers, many of whom are retired on very low pensions and whose position to-day can only be described as pitiful. There are others, members of local authorities, retired on very low pensions. Presumably, their case came within the ambit of the examination and I should like to hear from the Minister, when he is replying, what he proposes to do, what decision he has come to in connection with the matter and if he will make some announcement to the House.

Mr. Cosgrave:There are two matters that I wish to raise on this Vote. The first is the question of superannuation for the Civil Service. [2802] Deputy Norton dealt with it at some length and Deputy Dillon had something to add to Deputy Norton's statement on the matter. In order to understand fully the provisions of the Superannuation Act and how it affects members of the Civil Service, one should consider the two Superannuation Acts. The first Superannuation Act, passed in 1859, gave for each year of service one-sixtieth of the individual's salary and, in respect of 40 years' service, that came to be known as the forty-sixtieths. Subsequently, on representation from the Civil Service, the British Government came to the conclusion that the Act operated unfairly in the case of a civil servant who resigned owing to ill health and in the case of the dependents of a civil servant who died, for whom there was no provision of any kind. Consequently, the 1909 Act was passed which gave one-eightieth for each year of service and one and a half times the person's annual salary as a lump sum. In the case of a civil servant who died, the family were provided for by the grant of a lump sum and, for the purpose of the lump sum, the number of years' service was extended to 45. That Act, so far as existing civil servants at the time were concerned, was optional. A person in the Civil Service prior to the coming into operation of the 1909 Act could opt to take either the provisions of the 1909 Act or the provisions of the 1859 Act.

Anyone who came into the Civil Service subsequent to 1909 must take the provisions of the 1909 Act, so it is obvious that the number of people who are now affected by the provisions of the 1859 Act is quite limited and, as time goes on, not alone will they become more limited but they will eventually cease. In 1940 the Government stabilised, by Emergency Powers Order, the cost of living as applicable to the pensions of civil servants at 185 and the lump sum was also affected by that stabilisation. I think I might as well say here that the Superannuation Acts—the various terms were subsequently amended on a couple of occasions—were framed for stable economic conditions. While that was all right up to the last war, towards [2803] the end of the last war, when the cost of living rose considerably, the British Government of the time reviewed the terms of the Act and adopted a sliding scale for the actual salary and for the lump sum. The sliding scale was in the nature of a bonus and it operated more harshly on the lower paid civil servants than the higher paid ones, due to its peculiar structure. For that purpose, the lump sum was fixed at 75 per cent. in 1922.

At that time, the cost of living was going down and they could gradually scale down the actual salary, but the lump sum, being a fixed figure, could not be scaled and the way in which it was dealt with was by taking 75 per cent. I will give the House some figures to indicate how unfairly this operates on civil servants, and particularly on the lower-paid ones. A person who had a basic salary on superannuation of £200 suffers a loss as a result of the 1940 Order of £104, with £300, the loss is £128; on £500, the loss is £180; on £1,000, the loss is £213, and on £1,500 the loss is £194. It is obvious from that that the lower-paid civil servants suffer far more severely than the higher-paid ones, but, of course, the effects of it are felt by all sections of the Civil Service.

In 1922, when the lump sum was fixed at a reduction of 75 per cent., it was due to the fact that the cost of living was down much lower than it had been in 1919 and 1920. The cost of living fell rather rapidly annually for a number of years and showed slight variations of one kind or another about 1928, 1929, 1930 and 1931, until 1935, when the cost of living rose steeply. People who retired prior to 1935 are affected adversely by the operation of this Order because of what is known as an overriding maximum. While the pension and the lump sum could be graded down, there was an overriding maximum over which no increase could be granted, and in this way those who retired at that time, and who are a very small number, were affected far worse than those who retired prior to 1935.

However, in 1940, when the Government brought in the stabilisation [2804] Order and fixed at 185 the cost of living, it operated unfairly on civil servants who retired between 1940 and the 1st January, 1945, when the Government brought in Emergency Powers Order, No. 354, which lifted the operation of the stabilisation so far as it affects civil servants who retire on and from 1st January last and raised it to the figure of 210, which was the cost-of-living index figure at which wages were paid to workers in private or industrial employment in May of 1941.

The argument of the Government, when they originally fixed the Civil Service cost-of-living figure at 185, was that it was necessary in order to set a headline for the rest of the community; but if it was necessary to set a headline for the rest of the community, it might be explained why it was fixed ten or 11 months earlier for the Civil Service than for ordinary private individuals and also why it was fixed at 185 as against 210.

The Order, which was introduced at the beginning of this year, so far as it concerns civil servants who retire on and from 1st January, 1945, is unfair concerning the salary, but it shows nothing whatever of a lump sum or a gratuity and those people still suffer the injustice of the fixed figure of 185. As I have explained, the lump sum is really portion of the pension and must be regarded as provision for future needs. When the pension scheme was originally altered from the 1859 Act to the 1909 Act it was altered because the civil servants had made representations to the Government and the Government realised it was a very equitable method of dealing with civil servants whose death or illness left them no longer in a position to provide for their dependents. Therefore, the lump sum is really portion of the original pension, and while it is not regarded as a pension in the sense that an annual payment is so termed, nevertheless, from the whole structure of the Act and the structure of the superannuation scheme, it must be regarded as portion of the pension, and the mere form of it is for the convenience and assistance of civil servants and their dependents.

[2805] How far civil servants who retired between 1st July, 1940, and 31st December, 1943, suffer the worst of both ends of this scheme is clear. So far as this Order affects civil servants who retire after 1st January, 1945, they will not be adversely affected where the annual allowance is concerned, but the lump sum is cut at the 75 per cent. The Government must realise the steep rise which has taken place in the cost of living and which has affected all sections of the community, more particularly civil servants and teachers, whose salaries are fixed and who are not in a position to engage in any form of remunerative employment or undertaking, such as is available to other sections of the community.

I have here a note from the current issue of the journal of the Institute of Bankers in Ireland, in which there is an article entitled “The Post-War Pound”. It points out that, taking the Irish £ in September, 1939, as worth 20/-, its present purchasing power is 11/9, and compared with 1914 its value is only 6/9. It says further, that the corresponding values of the £ in Britain were 13/4 and 8/7, respectively. I do not know whether the Minister shares the same opinion as the Minister for Industry and Commerce, who always says, when faced with the depreciating value of the £: “If you give me 20/- I will give you £1”. That is all right, in the mere monetary idea of money in metal and notes, but when one takes £1 to purchase the articles which could be purchased for £1 in 1939, the basis of the argument falls flat. Everyone realises, and I am sure that the Minister for Industry and Commerce realises as well, that the purchasing value of the £ has decreased considerably.

For these reasons I urge the Government to reconsider the whole basis of this scheme. The people who are affected worst of all are those who retired between 1940 and 1943. The position is still not satisfactory, so far as the lump sum is concerned, for those who retired even since 1st January last. It operates most [2806] unfairly and, in the words of a well-known journalist, it is manifestly unjust to operate this Order against members of the Civil Service at a lower rate, from the point of view of the cost-of-living figure, than it has been operated against the rest of the community since May, 1941.

Deputy Dillon referred to the invariable Department of Finance rule which makes it obligatory on all Departments of State to submit any excess articles, which are no longer of use to these Departments, to public auction. He mentioned a recent case in which the Department of Defence sold lorries by a private arrangement or agreement, after these lorries had been valued independently by three valuers, to Córas Iompair Éireann. I can visualise circumstances which would necessitate such a course. These lorries might be bought by private individuals who wanted to store them or merely wanted them for ordinary trading purposes, and the Government might consider that, in present circumstances, Córas Iompair Éireann, being responsible for public transport, could better use the available lorries in view of the fact that lorries of all kinds are in short supply.

With that reservation, as applied to the present emergency, I think the adoption of private agreements between various Departments of State which have surplus property they no longer require, is contrary to all previous practice and is, I feel sure, definitely contrary to Department of Finance sentiment and contrary to the traditional parsimonious tendency of that Department, which has a certain responsibility to ensure that all available resources are exploited to the full and that no waste of public property shall take place.

I am anxious to hear the Government view. It does seem undesirable that any private arrangement concerning the sale or disposal of public property should be entered into, with the exception, perhaps, of the arrangement to which I have referred, and in regard to which there were peculiar circumstances due to the emergency. Other than that, I can see no reason for departure from the ordinary rule [2807] which compels the Department to auction all surplus goods publicly.

Mr. McGilligan:This matter of the Civil Service bonus has attracted attention not merely in this House, but in very wide circumstances outside. I am aware that certain clergymen with what, I think, would be regarded as sound theological views, have addressed representations to the Government on what they regard as the immorality of their attitude towards the Civil Service, and I think it has actually gone to the point where one clergyman, addressing himself to a particular Minister, has, so I am informed, said, that no doubt the Government had learned that there was a certain theological view taken of their attitude in this matter and he asked, if the Government had any persons advising them along those lines, he should be put in touch with them so that they could have the matter argued. I understand he received no reply to that communication.

Certain representations have been addressed to the Government to the effect that what they have done is grossly immoral. That it is clearly a breach of contract needs no stressing. So clearly was it a breach that the Government had to fortify themselves by special Orders to prevent the breach of contract being brought to the courts. They knew very well what the decision was bound to be if the case had been brought before the courts and, therefore, they prevented any application being brought to the courts. They protected themselves in the event of an appeal to the recognised courts of the country on a mere matter of justice from the point of view of morality.

Representations have been made to the Government that what they have done in this connection is grossly immoral—and that by people who would be expected to pay attention to the pietistic matters we have in the Constitution, matters pertaining to the requirements of prudence, justice and charity. When it comes to the application of justice for one class of the [2808] community, then the constitutional piety disappears. The worst feature is that in connection with the Civil Service the Government have had the best of it every time. Leaving out the question of morality for the moment, they made a contract with the Civil Service. They enforced that contract when it suited them. They gained for the State through the enforcement of that contract. The gain has been acknowledged, and it is a significant one.

That was at a time when the Taoiseach was stumping the country talking about his determination to cut down salaries. Feeling he might lose the support of the civil servants, he warned them that some of the higher salaries might be cut, but the bonus would not be cut—it was automatic. He said that after he had become a member of the Government, but, prior to becoming a member of the Government, he told these civil servants that not merely had they a contract and that it was a good one, but that it was such that they should hang on to it with all their might; in the days of rising prices that he saw ahead, the bonus would be their safeguard.

May I document those statements of mine? The secretary of the Department of Finance in 1931 said:—

“The civil servants have made an outstanding contribution to national economy. The accumulated saving effected from Civil Service pay, through the bonus, since 1922, is nearly £2,000,000. No other section of the community has so substantially contributed to the national economy.”

So we take £2,000,000 from them when the going was good, when the cost of living was going down. We let the automatic scale slide downwards and, over the years, we took £2,000,000. That was a gain which was expressed by the secretary of the Department of Finance as being such that no other section of the community had made a contribution equal to it.

In 1933, when he had become chief of the Government, the Taoiseach said at Ennis:—

[2809]“In my opinion it would be a bad thing for labour to agree to get rid of the sliding scale. I am as certain as I am standing here that world prices are going to go up and that the cost of living will go up, and, when prices do go up, it is a great boon to civil servants to know that their salaries will go up to meet the cost of living”.

So that, having taken the £2,000,000 from them when things were going well, the Taoiseach speaks in that fashion in 1933 and tells the civil servants that his forecast of the future is that prices are going to go up and he warns them: hang on to your bonus; it will be a great boon to you to know that your salaries will go up to meet the cost of living. Later in the year he said:—

“Our promise to cut salaries still remains good but this does not refer to the cost-of-living bonus which is automatic”.

If ever pledges were solemnly given, they were given in those words.

At an earlier date, the present Minister for Local Government, who afterwards became Minister for Finance, had referred to the appallingly unfair way in which the cost-of-living bonus was made up and he singled out in particular the matter of rent. He analysed the particular point taken as rent in the arrangement of the bonus and said that the average weekly rent in July, 1914, was 4/-. He brought it up to 5/2 in 1922 and said that it was on that percentage variation of just a little over 25 per cent. for the cost-of-living index which applies to the majority of civil servants living here in Dublin — and then, in his usual rhetorical fashion, this flourish came—“where you could not even get a dog-kennel let alone a house for 5/2 a week”. It is on the 5/2 a week, according to the Minister for Local Government, that one part of this index figure was based, so that it was fixed on dog-kennel conditions. Mind you, dog-kennels have become even dearer since, let alone the cost of a room, the cost of a house or the cost of furniture.

As I say, we got this great saving from this section—greater than any [2810] other section gave—in the good days, and, when times became bad, notwithstanding the promise of the Taoiseach, the decision is taken by the Government to stabilise the figure. I do not know why civil servants were singled out. Of course, it was easy to single them out—they were under the thumb of the Government. It was a mere matter of passing an Order and the thing was done, but that is not the way in which morality works or should work. Some case should have been made with regard to these people as to why the payment of bonus to them, when we had saved from them in the good days, on an increased cost-of-living figure should not have been permitted, or why the payment was going to disturb the whole national finances to some appalling degree. No such case has been made. The only case made is that if civil servants were paid on an increasing cost-of-living figure, if the bonus was not stabilised, there would be inflation—that marvellous word.

I have tried to get this understood by the House on many occasions. I want to try again. I cannot understand how the £ spent by a civil servant in this country is inflationary, whereas if that civil servant leaves the Civil Service, goes across to England and gets a job at £5 or £10 a week and sends back a £, the same £ spent in this country, derived in England, will not be inflationary. Yet that seems to be the argument. If a small number of civil servants broke away from the Civil Service and went across to England, there is no doubt that in a very short period they could earn sufficient to send home an amount that would certainly very nearly equate this sum of £1,000,000 a year which Parliamentary replies reveal is the saving on the Civil Service, but apparently if a civil servant gets the money here and spends it here, it is going to send our prices rocketing, whereas if a group of them go to England and send money home to their families, and their families spend it here, it is not inflationary.

I must confess to a sense of frustration every time I am faced with [2811] that argument. I do not know if it is seriously meant, but that is the only argument made. I think we are all agreed that this money is contractually owing to the civil servants. Apart from that, I say that it is morally owing to them, but it is certainly contractually owing, and if it were not for the stabilised cost-of-living figure, we would be paying it to them. If there were any difficulty about how it would be raised, we would meet that difficulty. We would regard the money as owing and, somewhere in the Civil Service Estimates, it would be included, and the money would be raised. We are not objecting to it on the ground that it is hard to raise the money. The only objection I have heard is that, if we gave them this money, it would be inflationary in character.

In England, they do not allow people to spend all they earn. Big wages are being earned and they have very definite controls in England. They take a certain amount of money from people by way of what are called deferred savings, and so on. They also try to attract money into certain forms of investment, but in any event they do not pretend that they do not owe the money. They pay the money, but they prevent the spending of it. Are we deferring the payment of this money to the civil servants? Are we piling up what we have taken from them as a debt due to them and are we going to loosen that some time when we get rid of this bogey of inflation, or are we, as I think is simply the case, robbing them of what we contracted to pay to them and what the Taoiseach asked them to think of as a great boon when he said that their salaries would go up to meet the cost of living?

On a very recent occasion, I gave one other example. Here we are unable to allow civil servants to get £1,000,000 between them and to spend it subject to whatever rationing control and all the other controls that exist in the country, but we are allowing any number of people, visitors and tourists, to come over to this country and to spend their money here. I notice that on a recent occasion, when the Chancellor [2812] of the Exchequer in England went to the meeting of the Institute of Municipal Treasurers and Accountants at the Guildhall on 22nd June last, he talked about the necessity of providing work by spending money. That was his theme, but the borough treasurer of Brighton, at the end of his speech said, with reference to the idea of inflation in England, that while there was a shortage of consumer goods, it was necessary that part of the national income should be saved and not spent. He added this phrase: “The paramount need is to remove our purchasing power to a place of safety.”

One of the places of safety is Éire. English workmen who may not spend the moneys they earn in England are floating over here. This is a place of safety for the purchasing power of the English pound. They spend it here, and again, apparently, it is not inflationary because an English tourist spends it, but it would be inflationary if an Irish civil servant spends it. What do the Government of this country do? Under our financial arrangements, if these English tourists desiring to come over here like to go to any of our banks, they must, on putting in an English pound, get an Irish pound. If there is any difficulty in supplying Irish pounds, the printing press is there and it is worked for English tourists. The machinery for getting money is simple—the background is somewhat complicated and confused—but there is no doubt that, so far as these people are concerned, on presenting themselves at an Irish bank and giving in a pound, they are entitled to get an Irish pound.

Suppose 1,000,000 of these pounds are brought in by tourists. We have then £1,000,000 suddenly emerging into Irish circulation, but it is in the hands of English tourists and not in the hands of Irish civil servants, and we will allow that money to be spent on our rather short stock of consumers' goods. Anyone who goes to hotels here during the summer and autumn will realise the difficulty that that means for the ordinary citizen of this country in trying to get, for his own money, some of the goods produced in his own country. There is no difficulty about getting the money as long as the English tourist wants it, and there is [2813] no difficulty in letting him spend it. What happens after that is somewhat confusing. Undoubtedly, if we allowed this £1,000,000 to flow out into the hands of the civil servants, we would have to find it for them, and it would be found in the ordinary way. We are under a duty to give to them and there is no difficulty about finding it.

What will happen with regard to the tourist money? That is somewhat problematical. Certainly, this is beyond all doubt: if those tourists spend £1,000,000 here, we will not get English goods to the value of that £1,000,000 this year or next year. It will be funded, and at some time, either in the near future or in the far future, we may get something for it. What will we get? We will get whatever the British Government decide is the value of the £ at the time it comes to be paid. At that particular period—the determination of that period does not lie with us, and the prospects are that it is a long way off—we will get something for whatever money has been transferred into Irish notes and which we will again transfer into English notes by presenting them to English banks, and it will be safely locked up in England until such time as the English like to unfreeze it. I think that, in all those circumstances, until there is some explanation given as to why £1 or £1,000,000 in the hands of the Irish civil servants is clearly inflation, while in the hands of the English tourists it is not, the civil servants have an undoubted grievance. Nobody, in fact, believes that there is any sincerity behind the plea regarding inflation.

I single out the civil servants as a class apart, because there are no other people with whom we have a contract. It is a contract made under Governmental auspices. Not merely is it a contract made under Governmental auspices, but the Head of the State, leaving all questions of contract aside, told those people: “Prices are going to go up. Hang on to your cost-of-living bonus. It will be a great boon to you.” It is an amazing thing that in this country where we pretend to be inspired with all the Christian virtues, particularly charity and justice, the Government should be able to say [2814] to those people: “We have you under our thumb. You are the nearest people to us. We can save £1,000,000 a year from you people, and we are going to save it, and if any of you think about walking into the courts we will see that you will not get there.” When theologians approached them about the immorality of their conduct, I understand that they took refuge in silence. The whole situation is so immoral and unfair that it is a source of anxiety and perturbation to clergymen in this country.

Mr. Davin:The question raised by Deputy McGilligan strikes at the root of good government, or bad government as the case may be, in this country, and I hope that those Deputies who could not see their way to listen to his speech, and to the previous speeches made on this matter, will at least take advantage of the holiday period to read the official reports of what Deputy McGilligan has been putting before the House and the country in connection with this very important matter over the last 12 months. I join with Deputy O'Sullivan in urging the Minister for Finance, on the first occasion on which he has appeared in this House in that capacity, to indicate whether his appointment means a change in the monetary policy of the Department, so far as the Department has a monetary policy. If he can indicate that that is the case, I certainly will gladly welcome his appointment to that position at this very critical period.

Deputies were furnished some months ago with a White Paper—a brown paper if you like—indicating the post-war development schemes to be carried out by the Government, and indicating quite clearly that over £100,000,000 will be spent in the post-war period, whether it is over a period of a year or five years or 15 years, in carrying out schemes such as rural electrification, housing, arterial drainage, waterworks and sewerage schemes in towns and villages where they are still badly needed. Of serious concern to the taxpaying community are the conditions under which that money is to be provided for the Government Departments concerned and for the [2815] local authorities who will act as agents for the Government in the carrying out of those schemes. I daresay the Minister for Finance, in company with his colleagues, must have given some consideration to the conditions under which the money will have to be found for the carrying out of those huge schemes. I know of no country in the world—I may be wrong in this; the Minister will contradict me if I am—where the cost of money for carrying on Governmental administration is so high as it is in this small country of ours. The Minister's predecessors in office, in the Fianna Fáil Government and in the Fine Gael Government, were the most generous Ministers for Finance so far as the moneylenders of this country are concerned. We were told in the Budget statement that the service of debt is costing the taxpayers about £4,000,000 annually. We are also told—I should like to be contradicted on this also if I am wrong—that out of every £1 collected in rates 7/- has to be set aside for the payment of interest on loans sanctioned by the different Government Departments. Surely that state of affairs cannot be allowed to continue. We also know that whenever the farmers—and it happens very often—apply for money to the Agricultural Credit Corporation to help them to carry on their farming activities, and to develop their land to the best possible advantage, their own advantage included, they have to pay very high rates of interest for it.

It is very difficult to understand where the Minister for Finance and his colleagues stand in regard to this matter. Last year, after having sought the approval of the country, the Government passed through this House an Act called the Transport Act. The question of guaranteeing the interest on the new debentures created under that Act was discussed at a considerable length here, and the Government secured a majority—I am not sure that they did not secure the unanimous approval of the House—in fixing a rate of 3 per cent. as the guarantee which the State was prepared to give the debenture holders in case Córas Iompair Eireann failed to find the necessary [2816] money out of revenue. If 3 per cent. is a fair rate of interest for the purpose of guaranteeing the new debentures, surely it should also be regarded as a reasonable rate of interest at which money could be borrowed by the local authorities, with the consent of the Minister for Local Government and the Minister for Finance, for the carrying on of those post-war development schemes and the carrying on of any other kind of local activities for which money must be borrowed? The average rate of interest paid by farmers who get loans from the banks or from the Agricultural Credit Corporation, and the average rate of interest paid over a period of years by the local authorities for money which they have been compelled to borrow, is in or about 5½ per cent. That is about 2½ per cent. higher than the rate at which money can be borrowed for the same kind of activity by the British Government, as far as I can follow their activities in Great Britain. Britain has been able to borrow money or get it off the printing machines— some of it money made by the sweated labour of the people of this country— on short term loans at the rate of 17/6 per cent., or roughly 1 per cent., for the purpose of fighting a war, for the purpose of the destruction of life and property in foreign lands.

An Ceann Comhairle:Did we not have all that on the Budget?

Mr. Davin:No, I do not think it was discussed in the same way.

An Ceann Comhairle:I do not want to rule severely, but I would remind the Deputy that this Vote has not been referred back to discuss policy.

Mr. Davin:I assume that the Minister for Finance is responsible to the House for the monetary policy of the Government. I am taking advantage of the fact that we have a new Minister who, I hope, will have a new outlook on these matters.

An Ceann Comhairle:I have already reminded the Deputy that, in order to discuss policy it would be necessary [2817] to have a motion to refer the Estimate back.

Mr. Davin:If I wanted to try and put myself in order I would be forced to oppose the passage of the Estimate for that purpose, and I suppose that would be in order.

An Ceann Comhairle:The Deputy has given no notice to refer the Estimate back.

Mr. Davin:During the 20 years that I have been in the House I have come in here on many occasions and did not give notice under the Standing Orders of what I was going to do.

An Ceann Comhairle:The Standing Orders and practice say that to discuss policy there must be a motion to refer back. I am not ruling strictly against the Deputy, but I ask him to bear that in mind.

Mr. Davin:I do not propose to detain the House very long. I hope the Minister will take up more time dealing with the matter so that the tax-paying community may be informed as to the conditions under which these huge sums of money will be provided for local authorities and State departments to carry out these schemes in the post-war period. If Deputies are entitled to get details of the various schemes, then I submit they are equally entitled to be told the conditions under which the money is to be provided for their execution.

I support Deputy O'Sullivan in asking the Minister to tell the House what has been the result of the Ministerial consideration which was promised to be given in connection with the teachers who, in these days of high cost of living, are trying to exist on miserably small pensions. Will he also say if any further consideration has been given to the appeals made here by Deputy Anthony, myself and other Deputies on behalf of a small number of persons who come in under the scheme for resigned and dismissed R.I.C. pensioners? Their position is that the members of the R.I.C. who served the British Government up to the period of disbandment received pensions from the British Government [2818] which, I suppose, are being paid by the taxpayers of this country at a figure that was 10 per cent. in excess of the pensions provided for those who resigned in response to the call of the Republican Government in 1919. I understand that in the middle of last year the British Government granted an increase of 30 per cent. to the R.I.C. pensioners who served that Government in this country up to the period of their disbandment, and that nothing has so far been done for the other section who served in the R.I.C. at a particular period. They have got no increase in the miserable pensions which were given to them long after the Treaty was signed. Has the Minister anything to say on that? I understand that repeated representations have been made to the Department of Finance in connection with that matter by an organisation which is acting on behalf of the few hundred people concerned.

I want to raise another matter which I raised previously on this Vote as well as on Budget discussions over a period of some years. I want to know if the new Minister for Finance intends to follow the bad example set by his predecessors in retaining the means test in connection with the payment of pensions to old age pensioners and blind pensioners. If the Minister has not had time to look into the matter since the date of his recent appointment, I hope he will take the earliest opportunity of doing so. Will he see whether the cost of administration, so far as the application of the means test is concerned, is not, in fact, more than the actual sum that is saved by applying the means test.

An Ceann Comhairle:The Deputy is now on Vote 70.

Mr. Davin:Fifty per cent. of the old age pensioners and blind pensioners are in receipt of a sum which is less than the miserable maximum pension of 10/-. That does not do any credit to the Minister for Finance or to the members of any Government who stand for a policy of social justice.

Mr. Aiken:A number of rather large issues were raised here to-day and yesterday as well as a number of [2819] smaller points. Deputy Cosgrave and Deputy Dillon raised the question of the sale of army lorries directly to Córas Iompair Eireann on the value assessed by a board of three independent valuers. While Deputy Dillon was outright in his condemnation of this particular transaction, Deputy Cosgrave followed his condemnation by saying that while it might be all right in this particular instance it would be a very bad precedent. I agree altogether with Deputy Cosgrave that it would be a very bad precedent, but in this particular case there is only a limited number of lorries available to transport the goods which require to be distributed throughout the country. In that situation, the Government deliberately decided that Córas Iompair Eireann, being the organisation responsible for the provision of public transport in all parts of the country, should be given the option of purchasing these lorries at a fair valuation, the value to be fixed by three independent valuers. If that could have been avoided and if open competition would not have driven up the price of these lorries to an exorbitant figure, or if it would not have had the effect of having some of them stored away until the end of the emergency when petrol would be in more plentiful supply, the transaction should not have taken place in this particular fashion. But, as there is a shortage of supplies, the Government has had on many occasions to distribute goods which are imported on the basis of need and of public interest rather than upon the basis of the sums which these goods would fetch in the open market. I instance such imports as agricultural tractors, threshing mills and threshing engines. They come in in very limited supplies, and I am perfectly certain that if they were put on the open market farmers who wanted tractors or threshing sets would be quite prepared to pay for them a very much higher price than the price at which they were invoiced. The Government took the decision, and the Minister for Agriculture implemented it, that the distribution of these tractors and other agricultural machinery should be controlled.

[2820] The Minister for Agriculture asked the chairman of the county committee of agriculture in each county, the county manager, and the county agricultural instructor, to recommend to him a list of the most suitable applicants in the county to whom these tractors would be given at the fixed price of import plus the ordinary profit. Here was a case very much similar to that in which Córas Iompair Éireann was given the first option on Army lorries. The Government in both cases was giving to the farmer who got the tractor or to Córas Iompair Éireann, a valuable option. If the Minister for Agriculture had not the courage to withstand the criticism that had to be withstood in order to do the best thing possible for agriculture, instead of ensuring that the tractors would go to the places where they were most required and to the farmers who would do the most work with them in the production of crops for the country, he would have allowed these implements to go to the highest bidder in the open market. Similiarly, if the Minister for Industry and Commerce had not had the courage to stand up against the criticism that he was doing something for Córas Iompair Éireann, he would not have tried to persuade the Department of Finance that, in this particular case, Córas Iompair Éireann should get the first option on these lorries. It was in the public interest, and in the public interest alone, that these particular transactions took place in that way and it is not to be regarded as a precedent, if we are not to regard the last five or six years of emergency as a precedent to be followed to the end of the world.

We hope that the emergency in regard to the supply of goods will come to an end so that open competition will settle prices as between the citizens rather than that the Government should have to step in and ration goods and fix prices. All I can say about that is that I agree with Deputy Cosgrave that, while this transaction was in every way justified, I would not like to see it becoming a precedent as to the manner in which Government property should be disposed of.

Deputy Norton raised the whole question of arbitration. He was followed [2821] by other Deputies. Deputy Norton knows the history of the Government's efforts to have a scheme of arbitration acceptable to the Government accepted by the Civil Service bodies as a whole. In 1939, negotiations were taking place between the representatives of the Minister for Finance and the Civil Service with a view to amending a scheme which had been submitted. I have read that scheme and I do not think that the Government should be asked to go any further than they went in regard to arbitration until we see how that scheme works out.

Mr. Norton:With all the vetoes?

Mr. Aiken:We will take the vetoes one by one, if the Deputy will wait for it. The scheme was first of all to have a system of negotiation between the representatives of the Minister for Finance and the Civil Service and to have negotiation machinery organised and, where that negotiation machinery failed, that the Civil Service could then approach the Minister for Finance with a view to arbitration. First of all, I want to say that, because of the peculiar place which civil servants occupy in the life of this community, their legitimate grievances should be met by the Minister for Finance and by the Government after normal negotiations and I think that it must be said, and I will say it, after having judged the general level of salaries in the Civil Service and the general level of salaries elsewhere, that the civil servants in this country, by and large, having regard to our national economy, have been treated fairly well in the past. That is not to say that there are not adjustments to be made. Even during the last five years of war, a number of adjustments have been made and they have been made, not as a result of arbitration, but as a result of negotiation between the representatives of the Minister for Finance and the representatives of the Civil Service organisations. Whether or not the Civil Service as an organisation accept the scheme of arbitration put up to them, that negotiation will go on.

Deputy Dillon put the point that because the Civil Service have no right [2822] to strike, therefore, they should have a right to have every grievance which they have put before an independent arbitrator and the result of that arbitration put into effect automatically by the Government and, he almost went so far as to say, by the Oireachtas. It is true that the Civil Service have no right to strike but the Government has not the same option that an outside employer would have of going out of business if he could not carry out the arbitration award and, while it is recognised that the civil servants are restricted by the fact that they have no right to strike, it must also be recognised that the Government is restricted. The Government cannot bind itself to accept an award which might in certain circumstances have the result of bankrupting the State. There must be some limitation.

Mr. Norton:Do you believe that?

Mr. Aiken:I did not interrupt the Deputy. The civil servants have no right to strike, and the Government of the country has no right to go out of business. In the final analysis, the Government here is set up as the arbitrator, not only between various classes of the Civil Service within themselves, but between civil servants and the rest of the community. I do not see how any Government could oblige itself to allow every question a Civil Service organisation wanted to raise, any demand for salary that they wanted to put, to go before an independent arbitrator, and bind themselves beforehand to accept such an award.

I hope that, with the passage of time, not only will the real income of the Civil Service be improved, but that the real income of the whole country will be improved. Over a number of years that has happened, and I say that no Minister for Finance in the future, if the national income of goods and services goes up, would hesitate to give the Civil Service and the other servants of the State their fair and due share of that national income. However, he cannot bind himself to rob the rest of the people on account of the result of an arbitration award. My advice to the Civil Service organisations [2823] is to accept the scheme of negotiation and arbitration put to them, knowing that the Government have decided upon it, and that no material change can be made in that scheme at the present time.

Mr. Norton:Will there be any changes made in it?

Mr. Aiken:Even during 1939, there were certain slight amendments put into it.

Mr. Norton:Is it contemplated making any more?

Mr. Aiken:No, but the amendments that have been agreed to can go through. Deputy Dockrell raised a point about the payment of some Civil Service pensioners fortnightly instead of monthly or quarterly. I do not know whether that is feasible or not, but it is a point I can look into later on.

Deputy Martin O'Sullivan, Deputy Mulcahy and others raised the important question of the rate which should be paid for money for public schemes carried out by the Government or by local authorities. I agree with Deputy O'Sullivan that, if possible, the Minister for Local Government and Public Health and myself and the local bodies should take time by the forelock and that, before the material becomes available for putting housing and other schemes into operation, we should get down to business and see in what way the money is to be provided and avoid at all costs various local authorities going into competition for the limited amount of savings of the general community. It is not true to say that there are no funds available to the local authorities unless they float stock on the market. After all, there is the Local Loans Fund, from which money always has been made available to local authorities for housing, sewerage and other works.

Mr. Norton:Would the Minister say what is the current rate of interest on the Local Loans Fund?

[2824]Mr. Aiken:It is 4¼.

General Mulcahy:And the Central Bank is earning 1.66 on its investments of £28,000,000.

Mr. Aiken:Does the Deputy want me to provide it for nothing?

General Mulcahy:Oh no; I would like the difference between 4¼ to local authorities and 1.66 to the Central Bank to be investigated..

Mr. Aiken:There were some small points raised by Deputy Norton. He asked why the engineering labourers did not get an increase in bonus during the war. First of all, they did get the emergency bonus of 11/- a week.

Mr. Norton:I acknowledge that.

Mr. Aiken:They did not get the couple of rises that the Civil Service got, because they were on a consolidated rate. They were consolidated about 1926, and for a long number of years afterwards they benefited by that consolidation. I do not know the exact figure at which they were consolidated, but I know it went down very much between 1926 and 1933, when it hit bottom at 150 above pre-1914 war.

The treatment of the Civil Service as a whole and the effect of the Government stepping in to say that their salaries were not going to rise with the cost of living is a very big question. While Deputy McGilligan wants to treat it as a particular and separate question, I do not propose to do so. In order to judge the morality or other wise of the Government policy in relation to the stoppage of the bonus increases, you have to take into account the general policy of the Government in relation to the rest of the community. The Government, whether wisely or wrongly—and I hold wisely— decided that, as far as we could prevent it, we would not have increased competition for a diminishing supply of goods. It is all very well for Deputy McGilligan in his speech to throw £1,000,000 to the Civil Service. The civil servants are only one class and they are only a very small class. If we [2825] are to throw £1,000,000 to them, why do we not throw another £10,000,000 to the farmers and another £20,000,000 to the Army? Is there to be any limit to the sums that Deputy McGilligan is going to throw around, or to the amount of purchasing power he is going to make available for a fixed quantity of goods?

In times when there is a fall in prices, as we had in the years after 1929, I would like to see the amount of money being increased, so that when the goods were available they would not go to loss for the want of purchasers, but it is foolish to attempt to get out of difficulties of short supply of goods and services, or to think you are going to increase them automatically in these times by increasing the amount of money that is made available to the purchasers. While I hold very strongly that if there were more goods available than there was money with which to buy them, we should increase the amount of money, I hold equally strongly that when there is a shortage of goods we should try to keep down the amount of money. I know there is one qualification that Deputy McGilligan would put to that. He would say: “If that is your policy, why do you allow British inflation to come in here in the form of tourists, who inflate the purchasing power here for a limited quantity of goods?” I would say that if we had no hope for the future, if we threw our hats at sterling being worth anything in the future, if we threw our hats at the tourist trade being of any value in the future, the right thing would be not to attempt, even though it might be an inconvenience to ourselves, to build up sterling assets. I am not quite so certain as Deputy McGilligan appears to be that sterling assets will be of no use in the future.

Mr. McGilligan:I have never said that.

Mr. Aiken:The Deputy went very near it.

Mr. McGilligan:No, I did not.

Mr. Aiken:The Deputy, speaking [2826] here—I can get the quotation—said, in relation to the last five years, that our sterling assets in London were not worth a penny.

Mr. McGilligan:Yes, for getting us goods.

Mr. Aiken:Let us take that. The fact of the matter is that our sterling assets in London have supplied us with £78,000,000 for the purchase of goods outside Great Britain since the beginning of the war. The Deputy could have got those figures by studying the trade and shipping statistics.

Mr. McGilligan:I have them here.

Mr. Aiken:Then, if the Deputy counts up he will see that we purchased, outside Great Britain, since 1939, £78,000,000 worth of goods which had to be paid for with our sterling assets.

Mr. McGilligan:And we got less than that from Great Britain—we lost on trade.

Mr. Aiken:But the sterling assets were worth something to us. I will admit quite freely that since the war we did not get back goods from England, pound for pound in value, for the goods we sent out. Instead of getting back the goods which we required, we were building up sterling assets in England. I wonder when did Deputy McGilligan enter into this terrible vendetta against sterling assets? I have no love for them. From 1932 to 1939 we were doing our best to translate sterling assets into capital goods in Ireland. Instead of having bigger bank balances in England, we wanted bigger factories and better farming in Ireland. Deputy McGilligan, Deputy Mulcahy, Deputy Dillon and others were going around weeping because of the disappearance of our external assets which then, as now, were largely sterling. I would much prefer if I could, by the wave of a magic wand, to translate the £300,000,000 or £400,000,000 that we have abroad into factories, farms, improved farming machinery and better drainage here. But we cannot do it. [2827] It is very late in the day for Deputy McGilligan, Deputy Dillon or Deputy Mulcahy to cry about the size of our foreign balances, seeing they were weeping so copiously about their disappearance into capital goods which came back to Ireland prior to 1939.

Mr. McGilligan:They were disappearing all right, but they were not being translated into capital goods.

Mr. Aiken:They were, and the Deputy can make any test he likes of the development of capital in any modern country, whether it is based on horse-power installed, electrical machinery, rateable valuations or anything else, and he must admit that between 1932 and 1939 the fixed capital and the wealth-producing possibilities of this country increased enormously.

General Mulcahy:And the men were going.

Mr. McGilligan:It is completely laughable.

Mr. Aiken:The men went, to a certain extent. When we came into office we did not undertake, in the period of a few years, to cure all the evils left behind by Fine Gael. One of the worst evils was not the fact that we had not their co-operation when we were fighting the economic war, but the disastrous effects their statements had on the mentality of the people. They were preaching through the country that we could not do anything; that the only thing the country could do was to hold on to its small external assets, to hold on to the nest egg. That was their policy. I remember, when Deputy Mulcahy was here as Minister for Local Government, we asked him to build houses, to bring in a scheme for housing the rural workers. What was his answer? He said: “We will do that, but we can do it only when prices and wages fall.” If we waited until prices and wages fell we would be waiting yet and we would have this situation, that instead of having 120,000 additional houses built, such as we got built between 1932 and 1939, we would have been building up bigger and better sterling assets in London.

[2828] Deputy Mulcahy was making a calculation the last day as to what would be the result of the creation of bank credit to the extent of £600,000, and he said that if they created that credit one-third of it might go to England to buy English goods. That is similar to what did happen. In the years between 1932 and 1939 we ate into our sterling assets, against the Deputy's will, and, with all the criticism that he could pour out, he tried to make people believe that we were ruined because our sterling assets were being translated into building materials which were coming back here to be erected on Irish soil to house Irish people. Now he is crying about the increase in our bank balances. I hope, when goods become freely available again, he will not be weeping if we try to translate our sterling assets in England into goods and machinery which will come back here to help to house our people, to equip our factories and produce consumable goods. I feel perfectly certain that if Deputy McGilligan is alive at that time he will start again trying to prove the disastrous consequences of the Fianna Fáil policy, one evidence of it being the disappearance of our sterling assets in England.

I thought Deputy Davin was going home, that he would not be waiting for the Old Age Pensions Estimate, when he mentioned the means test on this Estimate.

Mr. Davin:I thought we were discussing the three Votes.

An Ceann Comhairle:Yes. The Deputy said he did not think there would be much discussion on the others.

Mr. Aiken:The only thing about the means test in regard to old age pensions is that, if we got rid of it, we would save £40,000 in administrative expenses, while, if everybody over 70 years claimed and got a pension, it would add another £1,500,000 to the State bill.

Mr. Davin:Could the Minister say what would be the additional cost of bringing the 15 per cent. now in receipt of less than 10/- per week up to 10/- per week?

[2829]Mr. Aiken:About £500,000. There are a certain number of pensioners who went out over a number of years and whose pensions were fixed so that the sliding portion would not go above the point at which the bonus element in their salaries stood at the date of their retirement from the service. Again, if we were to change the scheme in regard to pensions, we would have to change our whole attitude to the standstill Order and the amending Order, and I do not think that now is the time to change our step in regard to the standstill Order. The cost-of-living figure has stood pretty steady now for well over a year, and I hope the next step it will take will be downwards, and if we were to adjust the pensions of those who went out in the past, we would automatically be compelled to allow every other element in the community to compensate itself so far as it could for the increased cost of living.

As I say, I believe that any such demand should be resisted at the moment. At the end of this emergency—and by the end of the emergency I mean when goods and services become fairly freely available again, and when we can get rid of Deputy McGilligan's bitter enemy, our sterling assets, to some good account—we can and should review the various amounts which various elements in the State are drawing from the public purse. If the country is producing or importing sufficient goods and services to increase the general standard of life, the State should try to do that, so far as possible.

If it thinks it has a moral duty, as it has, to look after those in greatest need; it should look after them to the best of its ability; but it is only a crazy policy to try to do more at any particular moment than you are fit to do. The individual who pays out more than his income is going to reach bankruptcy in a certain time, and if the State pays out more than its income; it is going to create a dangerous situation.

If we were to accept Deputy McGilligan's theory and bring it to its logical conclusion, it would be quite easy [2830] for the State—it would be quite easy for me as Minister to do it, if the Oireachtas empowered me—to double the quantity of money in the country in the morning——

Mr. McGilligan:It has been done.

Mr. Aiken:——to treble it, or to increase it tenfold, but I want to warn Deputy Norton and the people on our own benches who speak for the ordinary folk throughout the country, that if you double the quantity of money in the country, you increase the difference in real income between those on the lower scale of income and those on the higher scale. Let us take it that there are two loaves available and £2 available. The price of the loaf is £1. If you double the quantity of money, making it £4, the price of the loaf will go to £2. If one man has £100 a year and another man £1,000 a year, and you double the amount of money, the likelihood is that the man with £100 a year will not go to £200 and the man with £1,000 a year to over £2,000, so that the actual power of purchase is altered very much in favour of the man who was the better off at the beginning.

Mr. Norton:Would the Minister take a look at the other side of the argument? You have doubled the price of the goods and singled the wages.

Mr. Aiken:We did not double the price of the goods.

Mr. Norton:You are the greatest force in the country for doing it.

Mr. Aiken:What we did was, before the war, to take home some of our sterling assets and to start the production of goods which we otherwise would not have had during the last five years. The position with regard to raw materials and the fact that our farmers had to be induced to grow wheat did not arise by the will of the Government. The prices of goods here went up, but if we had simply added 70 per cent. to the amount of money circulating within the country and given it freely around each year to compensate for the rising prices, the [2831] people who would have been compensated most were the people with large incomes at the beginning. I do not propose to go any further into that element of the matter.

Mr. Norton:That is a good job, in any case.

Mr. Davin:It is interesting stuff for the records.

Mr. Aiken:You can have it for record, if you like, and see what you can make of it.

Mr. Norton:That is an unfair test.

Mr. Aiken:It is an unfair test on me.

Mr. Norton:It is unfair to put such an obligation on a Deputy on the last day of the sitting of the Dáil.

Mr. Aiken:I think I have dealt with practically all the points which have been raised.

Mr. Davin:Deputy O'Sullivan raised the question of the investigation promised by the Minister's predecessor as to the low pensions paid to State servants.

Mr. Aiken:I have dealt with that on general grounds as to what our policy should be.

General Mulcahy:I raised a question with the Minister for Finance on the Central Fund Bill on 14th March last. I put a case before him there which he said he would have investigated.

Mr. Aiken:I had time only to glance at the Deputy's questions. The Deputy asked, as far as I can remember, what would be the effect of the banks here creating a £600,000 credit.

General Mulcahy:Oh no, I did not.

Mr. Aiken:Well, that was the gist of it. He was asking the Minister to reduce the price applied to the banks to 2 per cent., and to the ordinary individuals in the country to 3 per [2832] cent. The effect of the spending of £600,000 here depends on what happens to the £600,000. If somebody dropped £600,000 from Mars into my pocket, and if I put it into banks, it would result in the deposits in the banks being increased by £600,000. If I spent it on importing goods from England, it would result in this country being £600,000 worth of goods better off. As I said, it all depends on what use is made of the £600,000.

General Mulcahy:I will give the Minister a better chance of understanding me on the Committee Stage of the Appropriation Bill.

Mr. Norton:The Minister mentioned, in justification of his present attitude, that those engineering labourers whose wages were consolidated in 1936 got advantages when the cost-of-living figure was falling, but of course he knows that the advantage they got was to work for the beggarly wage of £2 14s. a week. That is the only advantage they got, if one could call that an advantage. Since then, they have got an emergency bonus of 11/-, it is true, but other officers have got 11/- as well. Could the Minister not see his way now to re-examine that matter with a view to giving the engineering workers concerned the equivalent of the bonus increase which was granted to other officers as from 1st January last?

Mr. Aiken:I cannot see that we can make a breach in the standstill Order in regard to one particular class without making it all through.